| AB Energijos Skirstymo Operatorius (hereinafter – the Company or ESO), code 304151376, registered office address Aguonų St. 24, Vilnius. The total number of the registered ordinary shares issued by AB Energijos Skirstymo Operatorius is 894 630 333; ISIN code – LT0000130023. On 17 October 2018, the National Commission for Energy Control and Prices (hereinafter – the Commission) adopted Resolution No O3E-334 “On the recalculation of price cap limits for the distribution services by medium and low voltage grids of AB Energijos Skirstymo Operatorius for 2019” (hereinafter – the Resolution) whereby the price cap limits for the Company’s electricity distribution services were set for the year 2019. By determining the price cap limits, the Commission reduced the allowable rate of return on investment which was calculated by applying not the base of the asset value determined according to the accounting model of long run average incremental costs, approved by the Commission, but the base of the historical asset value. In the opinion of the Company, these adjustments of the rates of return on investment no longer meet the valid regulation for determining state regulated prices; therefore, the Company adopted a decision to appeal to Vilnius Regional Administrative Court regarding the amendment of the Resolution or elimination of particular clauses of the Resolution. The Commission’s decision on the determination of the price cap limits for 2019 (in the absence of unambiguous clarity regarding the consistency of principles of the applied regulation) and practical application of normative documents may have a significant negative effect on the value of the Company’s assets that is currently calculated and will be clear when an independent property valuer completes valuation of the Company’s assets. Information is not confidential. Representative for Public Relations of Energijos Skirstymo Operatorius AB Tomas Kavaliauskas, tel. +370 61751616, e-mail. tomas.kavaliauskas@eso.lt |